China's Quest for Great Power: Ships, Oil, and Foreign Policy

By Bernard D Cole

This book examines China’s national security strategy by looking at the three major elements—foreign policy, energy security, and naval power—all interactive and major influences on China’s future and its relations with the United States. A decade and a half into the twenty-first century, Beijing requires reliable access to energy resources, the navy to defend that access, and foreign policies to navigate safely toward its goals. Most importantly, the People’s Liberation Army-Navy (PLAN) must be able to safeguard China’s regional maritime interests, especially the sovereignty disputes involving Taiwan and the Yellow, East China, and South China Seas. Many Chinese naval officers and analysts think the United States is determined to contain China and prevent it from achieving the dominant historical position to which it is entitled. This view has been strengthened by Washington’s shift to Asia, transfer of naval units to the Pacific, and the March 2015 Maritime Strategy released by the U.S. Navy, Marine Corps, and Coast Guard. China’s relationship with the United States is vital to both countries and to the world. The relationship is based on both common and divergent interests in economics, military operations, and political goals and methods. China’s international trading economy and ambition for a world-class navy require effective foreign diplomacy and participation in global affairs. This policy trifecta in large part defines China’s posture to the world. Beijing is approximately halfway toward its mid-century goal of deploying a navy capable of defending China’s perceived maritime interests. China’s priorities follow President Xi Jinping’s definition of national security as “comprehensive, encompassing politics, the military, the economy, technology, the environment and culture.” What this means for future Chinese foreign policy choices, as naval modernization and energy security concerns enable different courses of action, lies at the center of this book’s conclusions.

• Language: English
• Publisher: Naval Institute Press
• Release date: Sep 15, 2016
• ISBN: 9781682471456

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MAP 1. Maritime Asia

MAP 1. Maritime Asia

This book has been brought to publication with the generous assistance of Marguerite and Gerry Lenfest.

Naval Institute Press

291 Wood Road

Annapolis, MD 21402

© 2016 by Bernard D. Cole

All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage and retrieval system, without permission in writing from the publisher.

Library of Congress Cataloging-in-Publication Data

Names: Cole, Bernard D., date, author.

Title: China’s quest for great power: ships, oil, and foreign policy / Bernard D. Cole.

Description: Annapolis, Maryland: Naval Institute Press, 2016.

Identifiers: LCCN 2016027911 | ISBN 9781682471456 (epub)

Subjects: LCSH: Sea-power—China. | Energy policy—China. | Energy security—China. | National security—China. | China—Foreign relations—21st century. | BISAC: HISTORY / Military / Naval.

Classification: LCC VA633 .C648 2016 | DDC 355/.033551—dc23 LC record available at https://lccn.loc.gov/2016027911

Maps created by Chris Robinson.

Print editions meet the requirements of ANSI/NISO z39.48-1992 (Permanence of Paper).

24 23 22 21 20 19 18 17 16     9 8 7 6 5 4 3 2 1

First printing

CONTENTS

List of Illustrations

Preface

Acknowledgments

List of Acronyms and Abbreviations

Introduction

Chapter 1China’s Maritime World

Chapter 2Maritime Forces

Chapter 3Maritime Strategy

Chapter 4Economy

Chapter 5Energy Security

Chapter 6Foreign Policy in the Making

Chapter 7Foreign Policy in Action

Conclusion

Notes

Bibliography

Index

ILLUSTRATIONS

Map 1.Maritime Asia

Map 2.UNCLOS Zones

Map 3.South China Sea Claims

Table 2.1Plan Orders of Battle, 2000–2014

PREFACE

The People’s Republic of China (PRC) was established on 1 October 1949, when the Chinese Communist Party (CCP) took power in Beijing following nearly a century of civil war and foreign invasions. China had, in the words of Mao Zedong, finally stood up. That announcement was followed by brutally enforced land redistribution, the Korean War, episodes of fanatical socialization, the disastrous Great Leap Forward, and the barbaric and chaotic Great Proletarian Cultural Revolution.

It was only following Mao’s death in 1976, a period of governmental confusion, and the imprisonment of the Gang of Four led by Mao’s widow that Deng Xiaoping was able to take power in 1978 and launch China onto a sea of economic modernization, social sanity, and relative political regularity. Even during Deng’s reign, China was rent by the social unrest of the spring of 1989, which culminated in the June Tiananmen Square massacre.

Since approximately 1980, however, China has established an overall record of economic modernization unique in history, lifting hundreds of millions of its people out of poverty. China has modernized its military, focusing on the People’s Liberation Army (PLA), as its dramatically increasing gross domestic product (GDP) has provided the necessary financial resources. All services and branches of the military have benefited, but the navy, air force, and the new Rocket and Strategic Support Forces now hold pride of place in China’s military priorities. The navy in particular is seizing the headlines, as the May 2015 defense department white paper depicts China’s future navy as a global force with far-reaching strategic missions.

This book focuses on China’s primary national security concerns. These include achieving world-class economic and military status; both of these goals require national energy security. Hence, Beijing is pursuing national security based on these three objectives.

ACKNOWLEDGMENTS

This book marks an important stage in my efforts to gain an understanding of some facets of the PRC. That process began at the University of Washington in 1970, where I benefited from studying with George Taylor, Robert J. C. Butow, Winston Hsieh, James Townsend, and others. Since then I have learned a great deal from many China experts. At the risk of omitting someone, I thank Kenneth Allen, Jeffrey Bader, Thomas Bickford, Dennis Blasko, Leah Bray, Scott Bray, Richard Bush, Michael Byrnes, Tai-ming Cheung, Warren Cohen, Thomas Christenson, Cortez Cooper, John Corbett, Thomas Christensen, Peter Dutton, Karl Eikenberry, Andrew Erickson, David Finkelstein, Taylor Fravel, Chas Freeman, Bonnie Glaser, Paul Godwin, Lonnie Henley, Charles Hooper, Linda Jakobson, Roy Kamphausen, James Kraska, Nan Li, Michael McDevitt, Frank Miller, Bernard Moreland, Jonathan Odom, Douglas Paal, Raul Pedrozo, Susan Puska, Alan Romberg, Stapleton Roy, Phillip Saunders, Christopher Sharman, Michael Swaine, Scot Tanner, and Larry Wortzel. This manuscript was read all or in part by Kenneth Allen, Thomas Bickford, George Eberling, Andrew Erickson, Eric McVadon, and Christopher Yung.

Any errors of facts or omission are of course solely my responsibility.

I owe many thanks to Susan Brook, Susan Corrado, Judy Heise, Rick Russell, and the staff at the Naval Institute Press, who are true professionals and very supportive. Patti Bower was a wonderful editor. I also note the superb leadership of Vice Adm. Peter Daly, USN (Ret.).

Cynthia Watson once again served as my most important editor, inspiration, and loving support.

This book is dedicated to the memory of Ellis Joffe, a pioneer in the study of China’s military and a generous, gracious human being.

ACRONYMS AND ABBREVIATIONS

INTRODUCTION

This book examines China’s national security policy formulation and implementation by looking at three major elements—foreign policy, energy security, and naval power—that are interactive and major influences on China’s future. The focus is maritime; the scope is the navy, energy, economy, and diplomacy, all at the strategic level.

The People’s Republic of China (PRC) was established on 1 October 1949, when the Chinese Communist Party (CCP) took power in Beijing following nearly a century of civil war and foreign invasions. China had, in the words of Mao Zedong, finally stood up. That announcement was followed by brutally enforced land redistribution, the Korean War, episodes of fanatical socialization, the disastrous Great Leap Forward, and the barbaric and chaotic Great Proletarian Cultural Revolution.

It was only following Mao’s death in 1976, a period of governmental confusion, and the imprisonment of the Gang of Four led by Mao’s widow that Deng Xiaoping was able finally to take power in 1978 and launch China onto a sea of economic modernization, social sanity, and relative political regularity.¹ Even during Deng’s reign, China was rent by the social and political unrest of early 1989, which culminated in the June Tiananmen Square massacre.

Since approximately 1980, however, China has established an overall record of striking economic modernization unique in history, lifting hundreds of millions of its people out of poverty. China has modernized its military, focusing on the People’s Liberation Army (PLA), as its dramatically increasing gross domestic product (GDP) has provided the necessary financial resources. All services and branches of the military have benefited, but the navy, air force, Rocket and Strategic Forces may be gaining prominence in China’s military priorities. The navy in particular is seizing the headlines, as the May 2015 Ministry of National Defense white paper depicts China’s future navy as a global force, with far-reaching strategic missions.

A significant driver of those missions is support for China’s continued economic well-being, particularly ensuring a secure source of the energy resources required to drive the economy. This book’s title refers to China’s modernizing navy and search for energy security. Both should be supported by an effective foreign policy, and both should support that policy, which combines hard and soft elements of the global power wielded by Beijing. Foreign policy formulation and execution thus form the third leg of the triad of twenty-first-century Chinese strategy and stature examined in this book.

Defining national security policy is an important starting point. In China, that phrase includes concerns considered in the United States to be domestic issues. Chinese grand strategy does not differentiate categorically between internal and external issues. This work focuses primarily on the external factors in policy formulation.

Different, sometimes competing, views of China’s future are offered by both American and Chinese analysts, who often draw on the same record and sources to support their different positions. The overarching question is whether China will displace the United States as the world’s leading power. That in turn raises the question of definition, of course; China is widely forecast to surpass the United States in economic terms, but forecasts of dramatic military power shifting are less firmly offered.² Some naval analysts foresee a Chinese navy more powerful than that of the United States, for instance, but they usually overlook the mission responsibilities of each: the U.S. Navy is tasked as a global force while for the foreseeable future—at least through the middle of the twenty-first century—the Chinese navy will remain primarily an East Asian regional force.³

One view of future U.S.-Chinese relations is the theory that a rising power inevitably will come into conflict with the current global power. The most vociferous American advocate of this problematic thesis is the political scientist John Mearsheimer. His Chinese counterpart may be Colonel Zhao Jingfang, an assistant professor at China’s National Defense University.⁴

Mearsheimer argues that conflict is inevitable as China approaches the United States in global power; Zhao argues, A tremendous power shift is underway in the world’s politics and economy today which is manifested prominently in China’s rise and the relative U.S. decline.⁵ While asserting that crises are inevitable between the two nations, Zhao is more optimistic than Mearsheimer about Beijing and Washington being able to prevent outright conflict. Perhaps the most measured and, hence, likely conclusion is provided by two American scholars, Adam Liff and John Ikenberry, whose recent analysis concluded that history demonstrates that not all cases of rising powers end tragically. No outcome is inevitable.⁶

A third, probably unquantifiable, measure of global power in addition to economic and military strengths is the sociopolitical strength that China and the United States possess. Some Beijing analysts may offer their current economic-political model, socialism with Chinese characteristics, as an alternative to American democratic capitalism for other nations to emulate, but there is little evidence of the international attractiveness of this concept.

Chinese analysts and opinion writers generally disclaim ambition to replace the United States, but the history of the rise and fall of great empires does not support this professed lack of purpose.⁷ A slightly but importantly different question was recently offered under the headline China Working to Dominate Sea Routes as U.S. Loses Interest.⁸ Apart from the fallacious assumption of U.S. policy and intentions, this topic more reflects Beijing’s concerns about ensuring energy imports from abroad than it does ambition to surpass the United States as a global maritime power.

China emerged from the twentieth century on a course of growing economic wealth and maritime power not seen since the U.S. phenomenon in the late nineteenth and early twentieth centuries. A decade and a half into the twenty-first century, Beijing requires, first, reliable access to the energy resources for continued economic growth and, second, the foreign policies to enable the nation to navigate safely toward its goals of economic growth and international stability.

Domestic concerns form the bedrock of China’s national concerns and underlie external issues. For example, maritime sovereignty issues are not just naval concerns but also affect the population’s views of the CCP legitimacy.

China published two relevant documents in 2015. The defense white paper on military strategy appeared in May, and the government announced in June it had enacted a new national security law. The first of these papers clearly expressed Beijing’s belief that a modernizing People’s Liberation Army Navy (PLAN) was required to sustain the country’s growing economy.⁹

The paper offered a clear explanation of President Xi Jinping’s China Dream, based on a national strategic goal of building of a moderately prosperous society in all respects by 2021, when the CCP will celebrate its centenary, to be followed by a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by 2049 when the People’s Republic of China (PRC) marks its centenary. A strong military is declared necessary as part of the Chinese Dream to make the country safe and secure.¹⁰

The national security law is effectively a command from President Xi to maintain the primacy of CCP rule throughout Chinese society. The law bolsters the power of the domestic security apparatus and the military. Security is emphasized in all societal areas, from culture to education to cyberspace. The law includes defending national security on international seabeds, in the polar regions, and in cyberspace and outer space.

Xi’s view of the PLA may be reflected in his September 2015 announcement of the first step in what is likely to be an extensive reorganization of the military to make it leaner and meaner. He announced a 300,000 personnel cut in the 2.3-million-strong PLA. A Ministry of National Defense spokesperson then announced the reduction will mainly target troops equipped with outdated armaments, administrative staff, and non-combatant personnel, with the purpose of optimizing the structure of the Chinese forces. The end of 2017 was given as the target date for completing the reduction.¹¹

Zheng Shuna, deputy director of the legislative affairs commission of the National People’s Congress, recently described China’s national security situation as increasingly grim, saying from the inside we are dealing with the double pressure of maintaining political security and social stability. She added that both internal and external elements of national security were more complicated than at any other time in history.¹² This was a startling opinion, given the past quarter-century or more of China’s remarkable development.

This confused view, if commonly shared, supports a Beijing goal of diminishing Washington’s dominance at sea, a possible policy discussed in the examination of China’s maritime strategy (chapter 3). That strategy may involve nothing more than expanding the distance between its coast and its effective foreign naval power, based on its natural desire to improve its capability to enforce and defend its insular claims in the East and South China Seas. As expressed in China’s 2015 military strategy, however, it includes the goal of exercising maritime power worldwide.¹³

The 2015 defense white paper is the first published by Beijing to focus on military strategy; it is particularly notable for addressing China’s modernizing navy, with an emphasis on global responsibilities for securing the country’s worldwide economic interests, particularly energy resources. The defense white paper is composed of six sections:

  I. The national security situation, with the primary security coming from the ocean;

 II. Missions and strategic tasks of China’s armed forces, with a focus on safeguarding overseas investment interests, protecting the lives and property of Chinese living abroad, and ensuring the resource supplies of Chinese companies and expansion of their product markets;

III. Strategic guideline of active defense, with a transformation of maritime strategy from offshore waters defense to one including open seas protection, and strategic [nuclear and conventional] deterrence and counterattack;

IV. Building and development of China’s armed forces, with the focus of winning informationalized local wars;

 V. Preparation for military struggle, in which the usual Chinese words about only fighting in defense are seriously qualified by the concept of active defense, with the navy becoming a maritime power in every corner of the globe; and

VI. Military and security cooperation.¹⁴

The May 2015 strategy features a near-nefarious view of the United States. There is no doubt about who Beijing means in the strategy white paper when it criticizes some states while more directly blaming the United States for inciting China’s sovereignty disputants in the East and South China Seas. The United States’ provocative military activities taking place at a very high frequency are criticized, as is U.S. interference with Chinese normal military activities.¹⁵

In sum, China’s 2015 military strategy assumes a worldview that is curiously bifurcated, with both a beneficent international situation weakened by specific threats. The CCP Politburo highlighted this latter view earlier in the year. The Politburo said that currently international developments are turbulent and volatile and our country is undergoing profound economic and social changes. . . . Social conflicts are frequent and overlapping, and security risks and challenges, both foreseeable and hard to anticipate, are unprecedented. . . . There must be constant strengthening of a sense of peril. . . . [The military must] strive to create high-quality, professional national security forces.¹⁶ The question of which of these views prevails obviously is key to gaining an understanding of national security policy formulation in Beijing. The likely answer is that both factor into Chinese policymaking on domestic and foreign fronts. This in turn raises the issue of the Chinese view of national security policies—they are viewed as far more united than divided between domestic and foreign issues.

A final element in Beijing’s view of the United States is the classic Chinese view that before the early nineteenth century China was the central country in Asia, if not in the world. Many facts support that view, but it seems to overlook the development of the Westphalian order, imposed globally by the West.¹⁷ That order remains in effect for the most part, despite U.S. advocates of the responsibility to protect, which has contributed to a quarter-century of continuous and, for the most part, profitless U.S. military interventions in the Middle East.¹⁸

Beijing’s goal likely is not to surpass or supplant the United States per se but rather to reestablish its country and culture as central to the region and possibly to the world. In other words, it demands respect, deference, and global influence, not domination. President Xi’s October 2015 speech at the United Nations included his announcement of expanded Chinese financial and personnel support for the organization’s global peacekeeping missions, a notable step in Beijing’s assumption of major power responsibilities.¹⁹ This book addresses how China’s current triple-headed drive for a modern navy, energy security, and an effective foreign policy supports that goal.

That drive will have to continue dealing with the strong U.S. presence in Asia. As discussed recently by the former U.S. Chief of Naval Operations, Adm. Jonathan Greenert, the United States has been engaged for more than seventy years in the Asia-Pacific region, and this will not change. Greenert noted that five of America’s top-fifteen trading partners and five U.S. treaty allies—Japan, South Korea, the Philippines, Australia, and Thailand—are located in the region.²⁰

Background

Securing global energy resources and deploying a modern navy are two of the key elements contributing to China’s foreign policy formulation.

The ruling CCP came to power in October 1949 after a long civil war. That victory resulted essentially from the dissatisfaction of the Chinese people after nearly a half-century of chaos preceding and following the 1911 fall of the Qing Dynasty. The CCP was able to impose order and institute immediate improvement to the daily economic and social life of much of China’s population.

The party’s continued legitimacy depends on its ability to continue ensuring order and societal improvements. Mao Zedong’s successor, Deng Xiaoping, initiated an economic revolution in China in the early 1980s that embraced a form of capitalism within the CCP’s reach, often called socialism with Chinese characteristics, as mentioned earlier.

China since has risen to become the world’s second-largest economy, built on an unspoken covenant between the CCP government and the populace: the former enhances opportunities for Chinese citizens to achieve an ever-improving standard of living; in return, the people leave governing to the party. This understanding appears to be effective.

An ensured secure supply of energy is a primary ingredient in maintaining China’s remarkable economic growth and prosperity. Imported petroleum products form an increasing share of that supply. These imports come largely from Southwest Asia, the Middle East, and sub-Saharan Africa. All of them depend on maritime transportation over long sea lines of communication (SLOC). In view of this maritime dependence, Beijing has been building a modern navy, whose mission it is, among other things, to safeguard the SLOCs on which the nation depends for energy imports.

Hence, the need constantly to acquire new energy sources and the need for a navy able to safeguard that energy’s transport to China form two important elements underlying China’s foreign policies. Those policies of course involve other nations, ranging from the United States to many of the world’s oil-producing countries.

Few if any of the earth’s continental spaces are either unexplored or not included in recognized national polities. The globe’s vast maritime expanses fall into a very different category. They are for the most part by definition and treaty categorized as the maritime commons or high seas, or international waters. However they are named, they are areas without commonly or legally acknowledged ownership or national sovereignty.

That state of affairs subsumes the absolute dependence on the seas for national and international economic viability, a fact tempting to the more powerful nations concerned about ensuring that reliance is not imposed upon. The United States, Japan, India, and China are leaders in both dependence and concerns about maintaining the accessibility and security of the maritime commons.

Those concerns were for a century or more ensured by the so-called Pax Britannica imposed by Great Britain’s Royal Navy during the 1815–1914 period, a role fulfilled by the U.S. Navy since World War II, three-quarters of a century ago. China now is challenging that Pax Americana, albeit perhaps incidentally rather than by design. That is evidenced to a degree by China’s development of a modern navy, capable of conducting assured operations on twenty-first-century oceans. However, that navy currently is being built and deployed at a moderate pace, with specifically prioritized strategic situations clearly in mind—Taiwan, the three seas (Yellow, East China, and South China Seas) that form the western Pacific littoral, and the SLOCs reaching across the Indian Ocean to the energy-rich regions of the Middle East.

The other side of the coin of China’s emerging, potentially dominant, global maritime presence is its merchant fleet, from graving dock to far-flung commercial routes. Paul Kennedy and Alfred Thayer Mahan wrote a century apart, but both recognized that global maritime powers relied for their vital economic strength on sea power, both naval and commercial.²¹ Measuring the importance of global SLOCs in the twenty-first century often focuses on transporting energy resources, but these are just one part of the overwhelming dependence on all international economic interactions, especially in China’s case.

This vital seaborne trade is measurable and accessible; in other words, vulnerable, since 80 percent or more of maritime traffic transits a relatively few geographic choke points. These include the Bab-el-Mandeb, the passage from the Indian Ocean to the Red Sea; the Strait of Hormuz, which is the entrance to the Persian Gulf; the Cape of Good Hope; the Malacca and Singapore Straits, linking the Indian Ocean and the South China Sea; the Panama Canal, connecting the Pacific and Atlantic Oceans; the Suez Canal, between the Mediterranean and Red Seas; and the Mediterranean’s western outlet, the Strait of Gibraltar. Perhaps less important in terms of transit loading but not in terms of national and regional reliance are the Turkish Straits / Bosphorus at the Mediterranean’s eastern end; the English Channel; the Northern Sea Route to Baltic waters; the potentially open Northwest Passage, as climate change continues causing the retreat of arctic ice; and the western Pacific seas already mentioned, plus the seas of Japan and Okhotsk.

The vital role filled by maritime cables is an area of maritime dependence seldom noted by analysts; they warrant notice since the cables carry so much of international communications. An unwelcome example of maritime cables’ importance came in 2011, when the massive Fukushima earthquake in Japan caused several seabed landslides, interfering with the operation of nearby cables. Similarly, a 2006 earthquake in Taiwan severely damaged communications cable linking Taiwan, Hong Kong, and many areas of coastal China.²²

Seaborne commerce rests on the ships that transport it, of course, but these in turn depend on the shore-based infrastructure of dockyards, cargo ports, personnel training and employment facilities, and governmental regulation and safeguarding. China is among the world leaders in the national registration of merchant ships.

China has a long history as a maritime power. Its best-known operations were the early fifteenth-century voyages of Zheng He, a Muslim eunuch who led fleets of large ships as far as Africa and the Persian Gulf. Although his fleets followed trading routes already frequently used, these were not primarily commercial voyages; rather, the renowned admiral conducted voyages that combined exploration with—despite the revisionist claims of current Chinese apologists—demonstration of Ming dynasty China’s military power. Hence, the well-armed expeditions included large contingents of soldiers that impressed and intimidated at every port of call as well as intervened in political contests in Southeast Asia and sought to suppress piracy.

Despite these and other notable periods of great maritime power, China has historically been a continental power, with land forces typically defending against threats from the northern and western reaches of Asia. However, Chinese leadership’s primary concerns are focused daily on the nation’s domestic priorities and problems. The overwhelmingly number one goal is maintaining the CCP in power, but that in turn means simply keeping the Chinese people satisfied with their current economic and social situation and, even more important, confident that they have the potential to improve those conditions.

The party’s legitimacy and durability are of particular concern to China’s leadership, a concern possibly intensified since Xi Jinping became the country’s leader in 2012. Concerns about corruption by CCP officials has long been recognized as a source of popular discontent with the party; by the end of 2014, more than 100,000 officials reportedly had been punished for corruption as a result of Xi’s ongoing campaign.²³

Another important focus under Xi has been the increasingly loud campaign to avoid infiltration of Western values into China’s education system and culture. This has been as significant as the concern about corruption linked to monetary gain. Minister of Education Yuan Guiren told an education conference in January 2015, Young teachers and students are key targets of infiltration by enemy forces. . . . We must, by no means, allow into our classrooms material that propagates Western values.²⁴ This twenty-first-century campaign echoes the mid-nineteenth-century campaign by prominent Chinese reformers who coined the slogan Western science, Chinese culture; those reform movements did not succeed.²⁵

Hence, the question of how China’s officials are going to seal their nation from Western values is both intriguing and disturbing. One obvious avenue is to ensure that society is ruled not by the rule of law but by rule by the Party. The political and economic implications are huge if China hopes to continue modernizing and increasing its global power status.

These and similar steps reflect the Chinese leadership’s likely problem with maintaining its population’s continued faith in the ability of the CCP to rule: maintaining economic growth and sustaining optimism. China has scored remarkable economic growth over the past three decades or more, measured in double-digit GDP annual increases. The announced 2014 GDP growth of approximately 7 percent is still impressive but a cause of concern to Beijing, which has instituted several reforms to encourage continued economic expansion.²⁶ Several problems dog the flourishing economy, including a housing bubble and an unpredictable stock market.

These modernization efforts almost certainly will conflict with the concomitant drive to prevent or at least control the influence of Western values on Chinese policy. One 2014 government announcement of grants for social-science research, for instance, included seven of the top ten projects dedicated to analyzing Xi’s speeches, rather than some more constructive topics.²⁷ A final concern in Beijing—one that directly affects and links economic growth, energy security, and political stability—is the gross air, water, and ground pollution afflicting China.

The international economic arena, where China already wields major influence, offers one venue for replacing Western influence. The October 2014 establishment of the Asian Infrastructure Investment Bank (AIIB) in Beijing seems an obvious step to challenge, if not replace, the Western-organized international financial framework that emerged from the 1944 Bretton Woods conference. The United States and its allies have dominated this construct, based on the World Bank, International Monetary Fund, and eventually the Asian Development Bank.

The AIIB may have originated in China’s desire to provide an Asian-based alternative, but it has attracted members from around the world, more than fifty as of October 2015. The United States apparently views the AIIB as a threat to the world economy it has long dominated, but Washington has been unable to halt or even slow the AIIB’s development, a sign of Beijing’s increasing importance in that economy.²⁸

The AIIB is just one of a series of potentially significant moves to provide China with increased roles in the international economic system. Other steps include the much-touted new silk road and the maritime silk road, more formally titled the 21st Century Maritime Silk Route Economic Belt. Collectively, these two avenues for Chinese geoeconomic and geopolitical influence are called one belt, one road.

Xi Jinping announced the establishment of these initiatives in October 2013, including a US$40 billion fund for investing in the countries lying along the roads.²⁹ What is most significant about Xi’s determination to redefine the international economic paradigm through the AIIB and to focus on China’s economic expansion to the west is that it represents Beijing’s determination to act as a global rule maker, not merely accepting rules established by the United States and its allies.³⁰

An even more recent addition to this initiative has been Beijing’s announcement of a US$46 billion investment fund to establish an economic corridor with Pakistan.³¹ These efforts to China’s west strive for economic gain but are inherently political in nature; they represent Beijing’s assumption that its efforts will not suffer from the political unrest lying at or near the surface of many of the Central Asian nations that form the road, and they represent stakes in the unspoken but very real contest with Moscow for garnering economic benefits and political control in that region.³²

These aspects are examined in later chapters as we survey economic conditions in China, the future improvement of which depends in turn on the government’s ability to maintain the security of the energy sector.

A Maritime Power

Asia’s inherently maritime environment retains the characteristics addressed by the Western naval theorists of the late nineteenth century. At the same time, this environment is subject to the rapidly changing technology of the twenty-first century, a phenomenon pursued by all Asian nations to the degree permitted by their resources and possible participation in maritime disputes. For instance, the number of Asian navies with significant submarine flotillas continues to grow. The United States, Russia, Japan, China, and India have been joined by North Korea, South Korea, Indonesia, Vietnam, Singapore, Malaysia, and Pakistan with submarine forces of note.

Additionally, the Asian maritime picture continues to be affected by